Barely two months after the spectacular implosion of the craft brewer he built into a £2bn icon of British entrepreneurship, James Watt is climbing back into the fermentation tank.
The BrewDog co-founder has unveiled Second Best, a new community-funded beer business that will hand up to 19.3 per cent of its equity, free of charge, to the small investors and bar staff whose holdings were obliterated when BrewDog was sold to Canadian-American cannabis and drinks group Tilray Brands for £33m in March.
Announcing the venture on LinkedIn, Mr Watt struck an unusually contrite tone. “Thousands of people trusted me to build a brilliant beer business and create value for them. It was an obligation I took very seriously. And I, for one, am not done with that obligation,” he wrote.
Under the proposal, former BrewDog “Equity Punks” will be invited to become “Second Founders”, claiming a stake in the new company identical in size to the one they held in the old one. “No catches, no cash required, and your equity in Second Best will always rank alongside my own,” Mr Watt said. “You’ll own it. I’ll fund it. And I’ll dedicate myself to building it.”
Almost all former BrewDog bar staff, who held shares at the point of collapse, are also expected to qualify. By Friday evening, Mr Watt told The Telegraph, more than 2,000 former Punks had registered interest – 500 of them within the first ten minutes of his announcement.
A leaner, canned-first model
In a marked departure from the sprawling bricks-and-mortar empire that became BrewDog’s defining feature, Second Best will be built around canned beer rather than pubs. According to the Financial Times, the venture will launch with two pale ales and a lager, brewed in Germany and across Europe. Mr Watt has indicated that a handful of specialist beer-focused pubs may follow once the brand is bedded in.
In a nod to changing British drinking habits, the company will also tease the market with what Mr Watt describes as an “alcohol-adjacent” concept before its first brews land. “I am going to make a non-alcoholic beer for my non-drinking wife,” he said – a reference to his spouse, the former Made in Chelsea star and I’m A Celebrity winner Georgia Toffolo.
The pivot reflects the wider commercial reality facing UK brewers. The low and no-alcohol category has surged past 200 million pints a year, while a punishing combination of input costs, business rates and shrinking discretionary spend has triggered a wave of insolvencies across the craft sector – a backdrop Business Matters has explored in its analysis of whether it is last orders for the UK craft beer sector.
Second Best has yet to secure all the licences and approvals required to begin trading, and no launch date has been confirmed.
From £2bn darling to £33m fire sale
The new venture marks a striking second act for one of Britain’s most polarising entrepreneurs. Founded by Mr Watt and Martin Dickie in a unit in Fraserburgh, Aberdeenshire, in 2007, BrewDog rode the craft beer wave to operate more than 120 bars across 57 countries and was valued at around £2bn at the height of its 2021 fundraising.
That high water mark proved fleeting. Five consecutive years of losses from 2019 onwards combined with mounting debts to its private equity backer, TSG Consumer Partners, to leave liabilities of more than £800m by the time of the brewer’s collapse. The eventual sale to Tilray, which Business Matters covered in detail at the time of the £33m rescue deal that closed 38 bars and cut 484 jobs, wiped out TSG, both founders and the entire Equity for Punks community – an army of more than 200,000 small investors who had collectively put in around £75m over seven crowdfunding rounds.
For Mr Watt, the fallout came on top of a difficult few years personally and professionally. He stepped down as chief executive in 2024, a move chronicled in Business Matters’ coverage of his departure amid controversies over workplace culture allegations first raised by more than 60 former employees in 2021. He has consistently said management needed to “listen, learn and act”.
Following March’s sale he publicly described himself as “heartbroken” for the Equity Punks who “did not get the return on their investment they wanted” and for having “dedicated the best 20 years of my life to something that ultimately did not have the ending we all wished for”.
Will the Punks bite a second time?
The central commercial question is whether trust, once forfeited at this scale, can be rebuilt. Equity Punks were as much a marketing engine as a funding mechanism; their evangelism turned BrewDog into a household name. Reproducing that flywheel without the headline-grabbing pub rollouts – and without the eye-catching valuations that powered successive raises – will be the test.
Industry observers note that Mr Watt is, in effect, attempting to invert the BrewDog playbook: lighter on capital expenditure, heavier on community ownership, and explicitly self-funded by the founder rather than underwritten by private equity. Coverage by trade title The Grocer suggests the canned-first, Europe-brewed approach is designed to keep fixed costs low and routes-to-market flexible while the brand finds its footing.
Whether it works will depend less on the beer and more on the maths. As City AM noted in its analysis of the “equity punk” comeback, Mr Watt’s pledge that Second Founders will always rank alongside him is a direct response to the preferential share structure that left ordinary BrewDog investors at the back of the queue when the music stopped.
“I feel an obligation to the Equity Punk investors. I want to try to create the future of beer,” Mr Watt told the Financial Times. “Hopefully, the second beer business I build with the community will be the best one.”
The name, at least, sets the expectations accordingly.
